What is the EMV associated with the best decision the decisionmaker should take?

Question

BlackTom AI · Accepted Answer

Here is how to approach the question and what to consider given the information provided.

First, identify the task: The question asks for the EMV (expected monetary value) associated with the best decision the decisionmaker should take. In decision analysis, EMV for a given decision is computed as the probability-weighted average of the outcomes (payoffs) associated with that decision across all possible states of the world.

Second, note that there are no answer options provided to compare alternate decisions. Without a set of candidate decisions and their corresponding payoffs across states, we cannot compute and compare EMVs directly for each option.

Third, outline the general calculation process, which applies once the data are available:
- For each decision option D, list all possible states of the world S1, S2, ..., Sn and the payoff (monetary value) that would result from D in state Si, denoted as Payoff(D, Si).
- Multiply each payoff by the probability of the corresponding state, Prob(Si).
- Sum across all states: EMV(D) = Σ_i [ Prob(Si) * Payoff(D, Si) ].
- Compare EMV(D) across all decision options D; the best decision is the one with the highest EMV.

Fourth, interpret the provided answer value. If 212.0000 is claimed to be the EMV of the best decision, this implies:
- Among all candidate decisions, the maximum EMV calculated equals 212.0000.
- Any other decision’s EMV would be less than or equal to 212.0000.
- The decisionmaker should select the option with EMV = 212.0000 to maximize expected monetary value.

Fifth, point out potential sources of confusion or error to avoid:
- If probabilities or payoffs are mis-specified, EMV calculations will be incorrect; ensure probabilities sum to 1 and payoffs are aligned with the correct decision-state pairs.
- EMV does not account for risk preferences or utilities unless specified; it uses monetary payoffs as the criterion.
- If there are ties (two decisions with the same EMV), the choice may depend on additional criteria (e.g., risk tolerance, other objectives).

Sixth, since the actual decision options and their payoffs are not provided in the prompt, a concrete, step-by-step computation cannot be performed here. If you supply the list of decisions with their state-by-state payoffs (or the EMV table), I can walk through the calculation explicitly and show how 212.0000 arises as the EMV of the best choice.

COMM_V 190 101-104 2025W1 2025W1 COMM 190 Final Exam - TUE Dec 09 2025 - Requires Respondus LockDown Browser

What is the EMV associated with the best decision the decisionmaker should take?

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